Wednesday, August 31, 2011
Tuesday, August 30, 2011
Monday, August 29, 2011
On 24 August 2011, the Defense Logistics Agency – Energy, on behalf of the Army, released a Request for Information, “concerning on-site, immediately adjacent or opportunities on other private lands for any type of renewable energy supply to serve the total existing and future electricity load at US Army Garrison, Fort Drum.”
According to the RFI, the load at Fort Drum appears to be a maximum demand of 27 MW. This follows on the heels of several RFIs from the Air Force Civil Engineering Support Agency (AFCESA) and nine from Fort Bliss, Texas for a variety of renewable efforts. The Fort Drum RFI states:
"The Army, acting through the contracting office of DLA Energy is requesting information concerning…… any type of renewable energy supply to serve the total existing and future electricity load at US Army Garrison, Fort Drum. Current contract authorities allow the Department of Defense to enter into contracts up to a maximum term of 30 years for the provision and operation of energy production facilities on real property under the Secretary's jurisdiction or on private property and the purchase of energy produced from such facilities".
When an RFI is issued, industry has to determine if they will spend their business development dollars responding to the request. Small businesses feel that they must respond in order to get their technologies on the table. With multiple RFIs out there, this can strain already constrained resources (have you tried to get a small business loan lately?). The opportunity for up to a thirty year power purchase agreement is gold when talking to financial institution and that coupled with sound technology and a good business plan should make raising money for this effort relatively easy.
For industry, it is a critical decision process and the need to prioritize is great. For DOD to achieve its very aggressive goals it must use 3rd party financing and this means that industry and financial institutions must be comfortable with the business case for each opportunities. One of the reasons the Army formed the EIOTF was to work on these large renewable opportunities.
So, when one of the scouts out there came across an article in the Watertown Daily Times it caused a bit of confusion. Seems the local Public Services Commission approved a request by ReEnergy Holdings LLC, Latham, to buy the on-post power plant at Fort Drum from United States Power Fund LP. According to the Daily Times, “If the deal closes, ReEnergy Black River LLC — a subsidiary of ReEnergy Holdings — will convert the 50-megawatt plant from coal to biomass fuel, primarily wood chips, but also tires and solid fuels, according to the petition it filed with the PSC on April 22.”
The local Congressional Representative William L. Owens, D-Plattsburgh, was interviewed and indicated that this effort is the continuation of “deal previously approved to sell the plant to Catalyst Renewables, Dallas”. He also said this was an effort to take Drum off the grid. DASA, E&S Richard Kidd indicated that there was no intent currently to “island” Fort Drum. Senator Schumer also pledged his support. Apparently this acquisition has been going on for some time and has excellent Congressional support.
The plant will lease the property from Fort Drum and sell power to the installation according to the article. This appears to be a classic enhanced use lease with power purchase agreement. Of course it is not clear if it is an enhance use lease or for how long the PPA would be.
The confluence of these two events causes questions. Did DLA-E not know about the conversion and sale of the on post power plant? Is the purchase of the plant and conversion an option for this RFI? I have made inquiries to the EIOTF and to DLA-E, however, (due to Irene, I assume), have not heard back from the Army or DLA. I did speak with a gentleman in the ASA, IE&E office who played down the importance of the supposed sale of the power plant affecting the RFI. He indicated that the power plant might be part of a proposal.
That might be news to ReEnergy Holdings LLC, Latham, since they already have approval from the PSC to buy the plant. Their parent company, ReEnergy Holdings, LLC appear to be well place to do this, having purchased the 22-megawatt Lyonsdale Biomass Facility in Lyons Falls in Lewis County, NY earlier this year. ReEnergy Holdings was started by a private equity firm, Riverstone Holdings, which was founded by former Goldman Sachs Global Energy and Power Group graduates. ReEnergy also purchase an Ohio based cogeneration plant for $61M this year, so somebody has figured out how to make this work!
Bottomline, the RFI process is costly in time and effort. It is important for the government to get the best information possible, but there has to be an indication of an ROI for industry in the effort. Not sure about this case. Dan Nolan
Thursday, August 18, 2011
Siemens and the North Carolina Solar Center will sponsor the subject conference at NC State on 21 Septmeber, 2011. Solar Exchange East, designed for manufacturers and developers of solar power, will include topics such as advancing clean energy for a sustainable economy, solar tracking and thin film technology, financing in the solar power industry and CAE advances in solar satellite development.
The agenda features notables from government, industry and academia. In an obvious attempt to fulfill some obscure quota, I have been asked to present as well. Fair warning.
Registration is available here. Hope to see you there. Dan Nolan
Tuesday, August 16, 2011
As visions of the fine work to be done by the Congressional Super Committee dance in our heads, the sounds of axes being sharpened at the Pentagon have drifted over to Foggy Bottom. Late last week, the co-chair of the Congressional Defense Energy Security Caucus (DESC) sent a letter to new SecDef Leon Panetta, urging him to prioritize DoD’s energy policies and budgets so that they are not disproportionally hacked when axe swinging time arrives.
In part, the letter said, "Investments in smart energy plans will not only show returns in security and mission success, but they will contribute to future cost savings and have a unique opportunity to help foster innovative and diverse energy and clean technologies to strengthen our economy".
The letter was co-signed by Reps. Roscoe Bartlett, R-Md.; Jack Kingston, R-Ga.; and the office of Gabrielle Giffords, D-Ariz., who also serve as caucus co-chairs. Representative Kingston has an extremely credible voice in this argument. His 1st District is home to no less than five major bases.
In my original post on the DESC I mentioned that the role of the Caucus “educate members of Congress and the public on the strategic value of utilizing sustainable energy sources for the U.S. military, highlight and support established and emerging defense energy initiatives, and find solutions to energy challenges facing the Department of Defense (DoD)”. Looks like DoD itself may be getting schooled.
Prioritizing these efforts higher in the food chain may not look like it makes sense from a tactical level, but from a strategic point of view, if DoD doesn’t lead, who will? If energy security is not a Defense mission, whose is it? What I really want to know is: Who is going to write the letter back?? Dan Nolan
Interesting reporting in Greenwire by Annie Snider (worth the few pennies a day to subscribe). The level of discussion of biofuel is moving beyond the concern for the price of corn; the Federal government is recognizing our dependence on a commodity we do not control. The President is considering invoking the provisions of the Defense Production Act.
The Act, passed in 1950, gives the President the authority to order business to sign contracts or fulfill orders determined to be necessary to national defense. It also allows the President to issue orders allocating materials, services and facilities to promote national defense. Finally, it allows the President to requisition property, force industry to expand production and the supply of basic resources, impose wage and price controls, settle labor disputes, control consumer and real estate credit, establish contractual priorities, and allocate raw materials to aid the national defense. The President will have to declare the technology to produce biofuels (which one(s)??) as critical to the national defense. If you are a fan of small government, you will love this! Sounds a little scary; but, then the days around the Korean War were a scary time.
According to the Department of Agriculture press release, the Navy and the DOE and will design a program to provide in the neighborhood of $500M to the biofuels industry to try to bring production facilities up to commercial scale. The provisions of the Act are administered by the Department of Commerce. The intent of the Act is to provide the military the critical material necessary for the national defense.
Normally, I am a fan of market forces and sink or swim in the economic area. Biofuels are a special case. If unusual efforts are not undertaken, biofuels will never get to a commercially competitive range. In case you have not heard, the top five companies for 2011 in America according to Fortune Magazine are:
- Wal-Mart Stores
- Exxon Mobil
- Fannie Mae
You may note that 2, 3, and 4 happen to be oil companies. I would surmise that they probably have the cash reserves to beat biofuels on price for a very long time.
The other argument you often hear against this is that the government shouldn’t pick winners. If you think that is the case, go talk to a contracting officer. The government picks winners all the time! Usually, in free and open competition. Presumably this program will select among the various contenders for performance (JP8 identical), sustainability (not food!), price, etc.
The bottomline is that we and our trading partners are vulnerable to oil depletion or denial. Biofuels are a step on the path to the final revolution in transportation…..flying cars! Or electric. Or whatever sustainable energy source can provide us the mobility we require without the vulnerability. Dan Nolan
Thursday, August 11, 2011
I have worked on both energy and national security issues for a number of years. "Of Mustard Fuel and Marines" by R.Adm. Robert James (ret.) in the Wall Street Journal of August 2 is both tendentious and inaccurate to an extraordinary degree. Our fighting men and women and Rocky Mountain Institute Chairman Amory Lovins, who often advises them on energy issues (and has posted a detailed reply under James’s oped), should be proud that a former oil company executive (VP of Mobil, economist at Continental Oil) should have to descend to such distortions in order to attack their efforts to move our military forces as quickly as possible away from dangerous oil dependence.
What motivates the military to work hard at this? "Fads" says James and "political correctness". He misrepresents Lovins as advocating the use of land appropriate for food crops to produce alternative fuels when in fact for decades the scientist has rather been a leading advocate of the use of feedstocks such as agricultural waste, prairie grass, and trash. James also ignores the innovative efforts by the Navy, his own military service, to use algae that require no land (just underground steel tanks) to make aviation fuel out of cheap sugar, as well as other types of algae that use very small amounts of land.
James ridicules "inventing cars that get 125 mpg". But my family already drives two that come near that: a plug-in Prius and a Chevy Volt. He also mocks the Marines, because of land-use issues, for experimenting with a truck-based plant that turns poppies into biofuels. But poppies are not known for their nutrition.R. James Woolsey is Chairman of the Foundation for Defense of Democracies, a venture partner with Lux Capital, and a former Under Secretary of the Navy and Director of Central Intelligence.
His strangest strawman is a mythical Marine unit commander, fanatically green, whom James feels he must caution not to endanger his unit by erecting a three-story windmill that discloses its position to the enemy. I have known a number of Marines over the years. This argument of James's is like the 13th chime of a clock – it is not only bizarre in and of itself, it calls into question everything that issues from the same source.
Wednesday, August 10, 2011
Tuesday, August 9, 2011
Energy Security is the assured access to mission critical energy at acceptable financial and environmental costs in an isochronous manner.
Thursday, August 4, 2011
In a previous post I mentioned that the Army’s Rapid Equipping Force (REF) was taking on the role of executor for operational energy, similar to the USMC Expeditionary Energy Office. I had the opportunity to speak with the current director of the REF, Colonel Pete Newell. COL Newell, former commander of the 4th Brigade Combat Team, 1st Armored Division is a veteran of Panama, Kosovo, Iraq and Afghanistan. As a side note, you can tell when the Army thinks a position is important; they assign a former brigade commander. Newell is only the second former brigade commander to fill this role. Good news for the REF. His predecessor, BG Dave Bishop went on to become a flag officer.
I asked COL Newell why the REF took on the energy mission. His answer surprised me, but should not have. As far as the REF is concerned energy security is just another problem that commanders in contact are experiencing and it needs an immediate solution. That is the mission of the REF. They are designed to find technology solution to commanders’ immediate battlefield needs. "The REF cannot solve all of the Army's Energy problems" he said. Newell clearly understands the challenge. He described a recent visit to a brigade in Afghanistan where the unit was preparing to resupply a combat outpost (COP). In order to do so it would be required to secure 7 or 8 valleys along the route. It would take two battalions to conduct the operation and would resupply the COP for 10 days. The operation would result in the COP having the beans, bullets, water and fuel necessary to execute its mission.
Unlike so many others who have created new organizations to deal with energy security, the Army turned to its utility infielder and said, “Here’s the problem; get some solutions”. It is not something special; it is simply another set of problems and the REF solves problems.
Newell’s own experience as a brigade commander in Iraq was being responsible for well over a dozen separate COPS spread out over swampy terrain with, in many cases, one way in and one way out. The danger was in becoming predictable if the supplies must go out every 4 or 5 days. If he could have reduced demand and had adequate storage as he did with food, ammo and water, he could have ensured that patterns did not become predictable.
In at time of dwindling resources, COL Newell felt assured that if the warfighter needs it, the Services will provide it. I asked what made this foray into operational energy different than the Power Surety experience. He said, unlike 2006, the DTOMLPF wheel has started turning with the publication of a white paper on power and energy by TRADOC in April 11. This begins the creation of a big “R” requirement for the Army Acquisition Community. Additionally, this time the leadership is committed with the Vice Chief of Staff coming up on the net and visits to the REF by the Assistant Secretary of the Army for Energy, Environment and Infrastructure as well as the Assistant Secretary of Defense for Operational Energy Plans and Programs. I hope they noted that after eight years the REF is still housed in trailers. They do not want to appear to be too permanent. Finally, MG Raymond Mason, the Assistant Deputy Chief of Staff, G4 has the rose for the Army for operational energy.
That energy is to be considered like any other logistical problem first, makes sense. We impose fire discipline because it is the most effective AND efficient way to employ a logistically constrained commodity. I never heard any of my gunners say they had too much ammo! The Army has a magnificent culture of discipline. They do not have to change that culture; just use it to change behavior. Energy discipline can be as effective as fire discipline.
Many have tried to make operational energy something other than it is. I like Newell’s approach. The real paradigm change is how he intends to go about it. In the early days of the REF there was an almost arrogance about the mission. They (we) felt that they (we) could not be held up by bureaucratic procedures imposed by what was considered an antiquated acquisition system. The REF was dismissed by the acquisition community as creating an unsustainable logistics environment and doing one off, “boutique” fielding of equipment. Newell is taking on the mission of creating solutions that are doctrinally sound, meet federal acquisition regulations legal requirements and are logistically sustainable. Previously,successful solutions were “thrown over the wall” to the acquisition and logistics community to figure out how to “field” the solution (vice “equip”) and to logistically sustain it. The new REF paradigm is to bring the team together so that parallel paths can move successful solutions more quickly into the mainstream.
For energy, COL Newell will pull expertise from Program Manager, Mobile Electric Power and Program Executive Office, Soldier, the G4, the Logistics Innovation Agency and other labs, agencies and industry as necessary, while still ensuring that the solutions get to the soldiers, sailors, airmen and Marines in a rapid fashion. This effort is to be commended and encouraged. Leave the egos at the door.
Energy is a battlefield commodity like water, ammunition and food. In order to sustain the war fighter we must be able to provide the “tools of Mars” in a way that is sustainable in blood and treasure. Fire discipline ensures that targets are serviced adequately without wasting ammunition. Murphy’s rules of combat says there will always be one more enemy squad than you have magazines. We need to think about energy use in the same way. If it is practiced at the installation, it can be second nature in the field. Sweat in training so you won’t bleed in combat. Same holds true for energy.
O.K., team. It is off to the banks of the Ohio River and Cincinnati for GovEnergy 2011. Look forward to seeing many of you there and posting from the site for those who cannot make it. Dan Nolan
- Doctrine: the way we fight, e.g., emphasizing maneuver warfare combined air-ground campaigns.
- Organization: how we organize to fight; divisions, air wings, Marine-Air Ground Task Forces (MAGTFs), etc.
- Training: how we prepare to fight tactically; basic training to advanced individual training, various types of unit training, joint exercises, etc.
- Materiel: all the “stuff” necessary to equip our forces, that is, weapons, spares, etc. so they can operate effectively.
- Leadership and education: how we prepare our leaders to lead the fight from squad leader to 4-star general/admiral; professional development.
- Personnel: availability of qualified people for peacetime, wartime, and various contingency operations
- Facilities: real property; installations and industrial facilities (e.g. government owned ammunition production facilities) that support our forces.
Wednesday, August 3, 2011
Retired Rear Admiral and former CIA branch chief, Robert James opines in the WSJ that the Military is taken in by fads and charlatans. Other than “The Army Wants to Join You” or George “Slam Dunk” Tenet, that appears to be a bit much. What ADM (R) James observes is that food for fuel and Amory Lovins are the latest incarnation of this. Some things I just cannot let pass.
With all due respect, Admiral, really??? We all get it, food for fuel is a bad idea. That being said, you do not make Grey Poupon out of camelina. The reference to camelina as a member of the mustard family is a ruse. "Look, they are using food!!!" In a similar vignette, a well intended Marine Sergeant conducted a cotton seed to fuel experiment in Afghanistan. This was a local “good idea” that was not sponsored by the USMC. Why? Because food for fuel is a bad idea. Next question. Fuel on the battlefield will be whatever is available; right now, fossil fuel is available. But if Kyrgyzstan starts growing camelina as a cash crop and makes fuel out of it, good for them and DLA-E can buy it and our equipment can use it. By the way, fuel on the battlefield does not cost $400 a gallon. Speechwriters, stop telling that to your bosses. Read this.
As far as worrying about the enemy seeing a windmill, you can see Camp Leatherneck from space! Of course the big, honking fuel trucks for the diesel generators wouldn't give up your position. Alternative and renewable energy is intended for big FOBs and small units. Thirty pound of batteries or ten pounds and a solar blanket (and twenty pounds of additional ammo) seems like a smart choice.
I do not know if Admiral James actually read “Winning the Oil Endgame” (WOE) all the way through or if he just dismissed it out of hand as the rantings of an “enviro”. If you read it, it is a business case argument for reducing mobility energy requirements and then providing that reduced requirement by, first, renewable fuels and then, for ground mobility, with electricity from renewable sources. Since only 1% of the energy used to move a car actually moves the driver, perhaps we could do better. Light weight, lower drag materials is what Amory talks about. Remember the Rand report quote? "…the military is best served by efforts directed at using energy more efficiently in weapons systems and at military installations." I would give WOE another read. If you would like to know what Amory Lovins thinks, read this.
Can we please elevate the discussion? We need not worry about the DOD giving up its mission in order to be "green". It is doing it to because commanders in the field are asking for it. It did not start with the Obama administration. It’s not political. The Joint Urgent Operational Needs statement that awoke the Military to this issue came from a Marine General in Iraq in 2006. As my first platoon sergeant said to me, "LT, if you are doing something stupid, you ought not do that". To imply that a commander who must deny the enemy knowledge of his location would put up a wind turbine intimates that the commander is stupid or that the reader is stupid. We old retired guys have to keep in mind that these kids out there commanding brigades are pretty sharp. Let us not use political paintbrushes to tar those who seek greater security. Dan Nolan